Time to start hanging up on phone service program

[Commentary] The mission of the federal Universal Service Fund was long ago accomplished, but it remain in place continuing to soak up tax dollars and subsidize service. Meanwhile, not only has phone service long since become "universal," but people are actually cancelling their wire lines in favor of other forms of communication, such as wireless. Although the USF has outlived its usefulness, our elected representatives keep it cranking along, even thought they know that the USF no longer maintains any pretense of improving the communications system in America. In fact, instead of going away quietly, the USF has over time expanded its mission, subsidizing broadband Internet access for schools, libraries and other facilities. But even that mission is complete. Yes, the subsidies provided to schools were helpful, but they probably are no longer necessary. Elimination of the cumbersome, outmoded universal service subsidy system would achieve several goals: 1) Reduce average consumer bills by removing the USF fees. 2) Allow state incentives such as tax abatements and deductions to be used more freely to entice development of infrastructure in rural areas. 3) Further development and deployment of new products and services to all customers more evenly and efficiently. Policymakers should learn from the wireless industry, where a generally light regulatory touch or outright forbearance on regulation has allowed wireless not just to flourish in the marketplace but to grow rapidly to the point that more Americans are wireless subscribers than wire-line subscribers. That also raises the question of why is there still a subsidy program for a shrinking communications mode.
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Barry M. Aarons is a senior fellow with the Institute for Policy Innovation, an independent, nonprofit public policy organization based in Lewisville. www.ipi.org